On November 30, 2023, Governor Kathy Hochul answered the long-awaited question of whether New York would join California, North Dakota, Oklahoma and, most recently Minnesota, as a state banning the use of non-compete agreements between employers and employees. While New York legislators passed a bill to do just that in June, yesterday, Governor Hochul announced that she would not be signing it.
As we previously addressed, New York’s proposed ban left open a number of questions regarding how broadly the ban would apply, including whether non-solicit clauses would remain viable. In speaking to reporters, Governor Hochul expressed concern regarding another point of overbreadth — that the proposed ban failed to strike the right balance between protecting low and middle-income workers while recognizing that higher-income workers have more negotiating power with employers. Preliminarily, Governor Hochul suggested a minimum salary of $250,000 as a potential starting point for when employees could be subject to non-competes.
Based on Governor Hochul’s comments, we may see New York adopt the model of many other states that have instituted minimum income thresholds necessary for employers to be able to enforce non-competes. Given the approximate $2 trillion size of New York’s economy, its actions have outsize influence. We will continue to monitor New York’s next steps.